IMF warns El Salvador indirectly to adopt Bitcoin as legal currency
The IMF published a blog to adopt Bitcoin as legal currency. They pointed out many risky factors which are very dangerous for a country with Bitcoin adoption as legal currency.
As all of us know very well that El Salvador became one of the first countries in the world which adopted Bitcoin as a legal currency. But they are facing lots of criticism from anti-government people and also from some big authorities like the World Bank. Now this is International Monetary fund.
Related: Protest against Bitcoin adoption Bill In El Salvador
The International Monetary Fund ( IMF) Authority published their raised issues against bitcoin adoption as a legal currency. According to the IMF, adoption of Bitcoin as legal currency will lead to very high fluctuations in the economy of the country and also it will lead into many problems which will be highly challenging. They pointed out that money laundering will be a big issue and will not be easier for governments to halt.
Adrian and Weeks-Brown stated:
“If goods and services were priced in both a real currency and a crypto asset, households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities”
They took reference of Bitcoin’s price which declined from 65k to 30k dollars. And that is enough to explain how the economy & prices system of goods will face problems because of such high fluctuations.
Also they said that Bitcoin adoption as legal tender is “an inadvisable shortcut” to the financial services. And also Bitcoin will cause risks for the environment because of mining operations.
It is noted here, Nayib Bukele, president of El Salvador, already said that they will use the thermal energy of their country for mining operations which will not lead to any risky result for the environment.
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